Trademarks, which identify the source of goods and services, account for the majority of intellectual property filings worldwide. We investigate how firms adapt to the introduction of trademark institutions by exploring a historical precedent: China’s trademark law of 1923, an unanticipated and disapproved response to end foreign privileges in China.
We study the effects of compliance with the value-added tax (VAT) by exploiting the reform that replaced business tax (BT) with VAT in China beginning in 2012. We find that replacing the BT with VAT significantly increases the reported sales and costs for treated firms, and the impact is much stronger for business-to-business (B2B) transactions than for business-to-consumer (B2C) transactions. Buyers in B2B transactions...
We explore the consequences of a 2004 tax change in China that reduced the value-added tax (VAT) on equipment investment. While the goal was to encourage technology upgrades, we find little evidence that the reform achieved its intended results. Although firms shifted the composition of investment toward machinery, actual investment rates were unaffected. Firms replaced labor with machinery, leading employment to fall significantly in the treated provinces and sectors. Our results suggest that the primary impact of the policy was to induce labor-saving investment.
We study the impact of recent tariffs on US prices at the border and at the store. Our results imply that, so far, the tariffs’ incidence has fallen in large part on US firms.
We use firm-level customs and manufacturing survey data, together with Input-Output tables for China, to examine how Chinese firms position themselves in global production lines. We document a sharp rise in the upstreamness of China’s imports, while the positioning of its exports has remained relatively stable, over the 1992-2014 period. Participation in global value chains thus appears to have facilitated an...